NPPC Asks USDA To Address Pork Industry Crisis

The National Pork Producers Council (NPPC) has asked the U.S. Department of Agriculture to help bail out the pork industry buffeted by rising feed costs and tightening credit markets

Apr 24, 2008

The National Pork Producers Council (NPPC) has asked the U.S. Department of Agriculture to help bail out the pork industry buffeted by rising feed costs and tightening credit markets.

NPPC officers and staff met Wednesday (April 23) with Agriculture Secretary Ed Schafer to urge him to take immediate action to address what is now being called a hog industry economic crisis which is expected to also affect the broader U.S. economy.

In the last seven months, the pork industry has lost more than $1.2 billion. Due almost entirely to a doubling of feed prices, producers now are losing $30-50 on each hog marketed. Lenders are estimating that some producers could lose half or more of the equity in their operations by the end of the year.

Economists suggest the industry will need to reduce production by at least 10% – or a reduction of 600,000 sows – to restore profitability. But that cutback could prove costly, resulting in less-efficient packing plants closing; less manure for crop fertilizer; and forcing a need for more commercial, foreign-produced fertilizer; a jump in retail pork prices due to a smaller supply; and lost pork industry jobs. Allied industries that gain from pork production, such as Main Street businesses, feedmills and trucking companies would also suffer. Agricultural credit problems would rise as some producers default on bank loans.

NPPC President Bryan Black, a pork producer from Canal Winchester, OH, requested that USDA purchase an additional 50.5 million pounds of pork for various federal food programs. This would effectively reduce the U.S. sow herd by 163,600 animals.

Black also requested USDA implement emergency programs and loan guarantees to help producers buy feed, consider allowing early release without penalty of non-environmentally sensitive Conservation Reserve Program acres back into crop production and support pork exports through USDA’s Market Access Program and Foreign Market Development Program.